essay
5
The 7.2
Detroit’s gentrification isn’t so much about the displacement of one group by another, as it is in New York or San Francisco. In the 1950s, the city was home to nearly 2 million people. Today, fewer than 700,000 people live here. There’s plenty of room for the city to grow, plenty of abandoned structures and vacant land that can be reinhabited.
Instead, gentrification here operates in two separate, concurrent processes: the rich, mostly white newcomers to the city and their allies in business get accolades from the press, the government’s attention, and the financial backing of Detroit’s nonprofit sector, while the rest of the city—the remaining 134.8 square miles outside the 7.2—slowly falls off the map, bled out by foreclosures, blight, and a lack of city services. For those who stay but cannot afford to be within the 7.2, the city is literally going to seed around them.
Cheryl West is one of the ones outside the 7.2. When I met West, she was standing in her front yard, surrounded by sixty cardboard boxes containing her life. A few volunteers from Detroit Eviction Defense—the city’s preeminent anti-eviction group—guarded her boxes and helped tape them up. Two gave an interview to a documentary filmmaker from Ecuador. Other men who were being paid a low hourly rate by Wayne County—the county that encompasses Detroit—lugged everything else from West’s former house and tossed it into a dumpster parked curbside. A sheriff’s deputy let West take one last look inside her house and give me a quick tour. She showed me the pink-carpeted living room; the kitchen, which had already been partially gutted by the house’s new owners; the spot where her father’s piano used to sit. West, sixty-eight, had lived here for sixty years. She’d seen her neighborhood go from majority white to black, through riot and police violence, through relative wealth and struggle. She’d seen it become what it is now—beautiful but severely decayed, its large four- and five-bedroom homes either boarded up or already gutted by people seeking scrap metal to sell, the storefronts on its main avenues shuttered, their windows broken, their roofs collapsed. We exited the house, and the deputy told the dozen or so neighbors, activists, and passersby assembled on
West’s lawn that from that moment on, only those employed by Wayne County could enter.
Cheryl West’s family was in many ways an exception to the rules that governed Detroit and much of the United States at the time. When West’s family moved in, every house in the neighborhood, along with many other neighborhoods in the city, had deed restrictions barring African Americans from buying them. However, despite those restrictions, West’s parents were able to buy the house from a Jewish couple looking to leave the city. They were the first black homeowners on the block. Her father was also the first African American music teacher in the Detroit Public Schools, and her sister was one of the only African American journalists to cover Detroit’s 1967 uprising for a national publication.
“We witnessed that riot and lived through it,” she told me from her lawn. “And I feel like there’s another one coming.”
West lost her house in the same way tens of thousands of Detroiters have lost their homes in the last few years: she couldn’t afford its astronomically high taxes. As more and more residents leave Detroit, the burden of paying for the city’s services falls on fewer and fewer households. Most residents of Detroit are poor, but they are nonetheless expected to fund roads, water lines, and everything else in the city through their property taxes, which can be thousands of dollars a year on houses that currently aren’t worth much more than $10,000 on the market.
For years, the city and the county encompassing it had allowed West’s taxes, along with the taxes of tens of thousands of others, to build up without taking action. When what she owed was too much to even qualify for a payment plan, they seized the house. West told me she’d tried to gain admission to a tax program started by the state of Michigan for those struggling to stay in their homes, but because of a technicality (she didn’t live in the house for about a year while she helped take care of one of her last living family members in California) she was denied four times. In fact, one-half of all people who attempted to enter that program were denied. So Cheryl’s house was sold at tax auction by Wayne County for $20,000 in 2015 to a young African American woman who owns several in the neighborhood. Cheryl is currently staying on the top floor of a friend’s house up the block. Her things are in storage. And now another house sits empty, though only temporarily, on a block that already has plenty of gutted houses in a neighborhood with more empty lots than full ones.
Meanwhile, the 7.2 is booming , at least compared to the rest of Detroit. Detroit has 53,000 vacant homes, but within the 7.2 square miles that make up downtown (Gilbertville), Midtown (where Sue Mosey works), Corktown (where Phil Cooley owns property), and three other centrally located neighborhoods, more than 90 percent of homes are occupied. Detroit lost 25 percent of its population between 2000 and 2010, but the 7.2’s loss was only half that. Its boosters say the area is also getting more diverse. In reality, it lost 5 percent of its black population in those years and gained 3 percent more white people. While everywhere else in Detroit the housing stock continued to disintegrate, the 7.2 added 1,300 new units of housing, a 5 percent increase. Between 2010 and 2012 there were sixty-five new building projects completed within the 7.2, and another sixty-five are under construction or in the planning phases. If
you look only at the 7.2, it seems as though Detroit is doing pretty well. It looks like the wooing of the creative class is really paying off.
But incentives and investments large and small predestined this area of Detroit to come back while the rest of the city falls off the map. As early as the 1990s, business leaders and the heads of foundations encouraged the city to focus its investments solely within the 7.2, which is both more densely populated and has a denser stock of buildings than most of the rest of the city, and closer to the skyscrapers where the city’s elite work. That investment has picked up steam in recent years, with Dan Gilbert buying at least eighty buildings downtown. When he moved Quicken to Detroit’s downtown, the state gave Gilbert a $50 million tax break , the largest incentive in the state that year. Then, when Gilbert bought an iconic Art Deco building downtown in March 2015, Detroit’s mayor, Mike Duggan, cooed, “ I’m excited that somebody successful is acquiring all these properties.… I couldn’t be more pleased with what Dan has done and his contributions to the community.”
Gilbert’s investment hasn’t ended with buildings— he’s built an entire security force that patrols downtown and monitors more than 500 security cameras attached to buildings Rock Ventures owns. From a command center in a Rock-owned building, Gilbert’s force watches nearly every corner of Detroit’s downtown. His agents coordinate closely with Detroit’s police. Gilbert’s security, along with a police force privately funded by Wayne State University in Midtown, have become a kind of shadow police agency, ensuring that low-level offenses in Detroit’s gentrified core remain at a minimum. Wayne State, Detroit’s main university, has taken security one step further by certifying its sixty officers with the state so that they can perform the same functions as real police. Now 60 percent of calls within Midtown are answered by Wayne State’s patrol. The average response time in Midtown is ninety seconds. In the rest of Detroit, it can be up to an hour, even for deadly crimes.
Gilbert has also chipped in for other projects that would usually be funded by cities— the M-1’s $179.4 million cost will be paid mostly by corporations and nonprofits, including Quicken. The biggest funder was the Kresge Foundation (mission statement: “Creating opportunity for low-income people”), which contributed more than a quarter of the total. Gilbert has also funded the revitalization of parks and plazas downtown.
And there are other, less visible ways Gilbert has spread his vision of a bustling, millennial-filled core city. Employees of Compuware (owned by Quicken), Quicken Loans, DTE Energy (Detroit’s main energy company), and a few other companies can get $20,000 of forgivable loans to purchase a home or apartment within the downtown area, or $3,500 in rental subsidies. Midtown Detroit Inc. has a similar program that has raised $10 million from employers in the area to incentivize 2,000 people to live in Midtown, according to Sue Mosey. Occupancy in Midtown is now at 98 percent.
The people who are benefiting from all these subsidies—the gentrifiers of the 7.2—do not seem to realize the work that has gone into bringing and keeping them there. They consider themselves cunning pioneers who’ve figured out how to make the economics of a rough city work, ignoring the fact that hundreds of millions of dollars that could
be used to keep people like Cheryl West in their homes are propping up their lifestyles of conspicuous consumption. And they do not seem to realize that they are benefiting directly from the past oppression of those whom they hope to lift with their rising tide.
Detroit was made cheap and therefore attractive to gentrify because, beginning in the 1930s, its black residents were systematically denied jobs in the booming auto industry and, later, mortgages in the suburbs as the housing industry took off. Detroit’s black residents were hired last and fired first when the auto industry collapsed; they were foreclosed upon and denied basic city services. The racism of Detroit’s geography means that the city’s population decline has been incredibly uneven: between 2000 and 2010, the white population of the city decreased by 35 percent, while the black population decreased by 24 percent. Detroit’s rebirth has been built on the backs of people who were too poor to leave. And the 7.2 can exist only as a heavily subsidized state, perpetuating the historical constriction of subsidy and wealth to the rest of Detroit.
Of course, private companies and foundations can do what they wish with their money. As Sue Mosey told me, they’re not required to do the public sector’s job of ensuring that the poorest of Detroit’s citizens have good parks, fair policing, transit, jobs, and housing. And activists here aren’t even suggesting that they do that job. The problem in Detroit isn’t necessarily the money being poured into Midtown and downtown but the fact that it’s happening in a vacuum. The private and nonprofit sectors have virtually replaced the public sector in the city’s most gentrified areas. And with the absence of a public good, there’s no guarantee that Midtown, downtown, or any of Detroit’s other gentrifying tracts will be amenable to anyone but those who make Quicken Loans–level salaries.
If the early stages of gentrification in the city are any clue, that’s exactly what’s happening. John Varvatos shoes, bars with $15 cocktails and coffee shops with $4 coffee, Shinola watches, Detroit Bikes—these are meant for people with large disposable incomes. And while there’s no sign on these businesses’ doors specifically prohibiting the old, largely African American Detroit from entering, their gentrified aesthetic and high prices may have the same effect.
“ Nobody wants to inject race into the marvelous story of downtown’s rebound, driven largely by young creatives who grew up in the suburbs and are now fiercely Detroiters. I don’t either. It’s a downer,” Detroit News columnist Nolan Finley wrote in 2014. “[But] it’s a clear red flag when you can sit in a hot new downtown restaurant and nine out of 10 tables are filled with white diners, a proportion almost exactly opposite of the city’s racial make-up.”
As Tonya Phillips, a black Detroiter and the executive director of Southwest Detroit Community Justice Center, put it to me, the new Detroit is nice; it’s just not built for her.
While nonprofits and corporations are the main funders of Detroit’s new economic segregation, the government at all levels has placed its thumb on the 7.2’s side of the scale. Just weeks after Detroit filed for bankruptcy—a process that
would see city workers’ pensions cut and a variety of city services reduced—Dan Gilbert traveled to the White House and convinced President Barack Obama to spend $300 million on Detroit, including $35 million for the M-1, and $150 million on blight removal, knocking down unoccupied houses throughout the city. It’s unclear exactly how that $150 million was and will be spent, but a good chunk will go toward demolishing homes that Gilbert’s Quicken Loans were partially responsible for making blighted in the first place. Quicken has for years insisted it did not engage in the same practices that led millions of Americans into foreclosure after the 2008 financial crisis. But an investigation by the Detroit News found that Quicken had the fifth-highest number of mortgages ending in foreclosures in the city. Half of those foreclosed properties are now blighted.
Maybe the most egregious example of government funding going toward the 7.2 was the 2013 deal made by the Detroit City Council to pay for 60 percent of a new hockey arena for Red Wings owner Mike Ilitch. Ilitch, a Detroit billionaire pizza magnate (he owns Little Caesars), already has an arena: Joe Louis Arena, located on Detroit’s waterfront. The new facility will come with housing, office space, and upscale retail, all located on Midtown’s most gentrified strip. The project will cost the city of Detroit $261.5 million . Ilitch will get to keep all of the revenues from the arena. The money the city spends on the deal would have otherwise gone to fund Michigan public schools. The state says it will make up the difference , so Detroit students won’t be affected. It’s unclear exactly where the state will get the money from instead.
While the Red Wings arena deal is a particularly large example of government waste in Detroit, it’s not unique. The city also awarded Marathon Petroleum $175 million in tax breaks to expand its oil refinery in the city. In return, the city got fifteen new jobs. And in 2012, the mayor’s office sold 140 acres of public land in the center of the city to another Detroit multimillionaire, financial services executive John Hantz, for $520,000. Hantz had promised to develop the land into a tree farm, though many in the city believe his urban agriculture idea was a ploy to get cheap land in the center of Detroit that can eventually be converted into profitable housing.
Outlandish subsidies for multimillionaires isn’t a phenomenon seen only in Detroit. Michigan gives away 30 cents of every government dollar to private companies. And in other cities, stadiums and ballparks are routinely paid for by governments, all with the hope that they’ll help stimulate revitalization, even though economists nearly unanimously agree that spending public funds on private stadiums is one of the least efficient ways for governments to spend money. But the strategy is perhaps particularly troubling in a city where garbage collection, street repair, and streetlights are considered privileges.
“Our history is this scattergun approach,” said Eric Larson, one of Detroit’s biggest developers and the CEO of the Downtown Detroit Partnership, which helps coordinate investments in the city’s core and which was involved in the Red Wings arena deal. “That doesn’t work. Finally we’re starting to focus and concentrate investment.… Whether we like it or not, if we don’t have the large entities that are taxed the way they’re taxed, the city doesn’t have anything to operate on.”
Mark Wallace, another longtime developer and the head of the Detroit Riverfront Conservancy, put it another way: “As we make Detroit better for one person, we make it better for everybody.”
Yet when community activists have tried to ensure that this trickle-down development strategy does indeed result in trickle-down benefits, developers have fought them tooth and nail. For years city activists have sought to pass an ordinance that would require the developers of Detroit’s biggest projects (including the Red Wings arena), as well as developers of projects seeking $300,000 or more in public funds (also including the Red Wings arena), to enter into contracts with the public that would provide guarantees of local jobs and other quality-of-life measures. The entire development community lined up against it. A bill introduced in the state’s legislature would ban community-benefits ordinances altogether in the state of Michigan, even though Detroit is the only city in the state considering one.
I asked every developer and pro–new Detroit figure I spoke with what they’d say to all those who feel like they’ve been left out of the recovery—those who see hundreds of millions of dollars in public funds, and billions in private funds, go toward just about 3 percent of the city’s landmass while they get left out. And all said something similar: eventually everyone else will be helped too.
“Nothing happens overnight,” Sean Jackson, a Rock Ventures employee who is close with Dan Gilbert, told me one night. “I would say wait and hope.”
Detroit did not need a hurricane to rid itself of the poor. There may not have been a natural disaster or a military occupation in the Detroit outside of the 7.2, but I’ve nonetheless heard it compared to apartheid South Africa and called “ a Katrina without water .” While the 7.2 gets hundreds of millions of dollars, the rest of Detroit, the unprofitable Detroit, is being bled out.
These phrases might sound like rhetoric, but the numbers involved in Detroit’s destruction lend themselves to dramatic terminology. Beyond the newly built-up downtown and Midtown, Detroit is in crisis. Detroit’s median income is about $25,000, roughly half that of the United States as a whole. It has a poverty rate three times higher than the rest of the country.
Its unemployment rate is nearly 25 percent , double or triple the rate of most other big cities. And because Detroit charges some of the highest household water rates in the country (about $70 a month on average, compared to the national average of $40), nearly a quarter of the population is behind on their water bill. In 2014, the city began shutting off water to those residents, leaving thousands without access to fresh water. Experts from the United Nations called the move a violation of human rights.
Detroit, like everywhere else in America, was also hit by the subprime mortgage crisis in the 2000s, only much, much harder. Sixty-eight percent of all mortgages to Detroiters in 2005 were subprime, compared with 24 percent
nationwide. Gilbert’s Quicken Loans made some of those loans; others were made by the same banks that demanded Detroit pay them back by slashing city employee pensions during the city’s bankruptcy. Now more than half of those homes are abandoned and blighted, nearly all of them in the outer parts of the city. The county has also been directly involved in the mass exodus: while it’s easy to snap up a house for $5,000 or $10,000 in many Detroit neighborhoods, houses are often assessed as if Detroit is still a hot, or at least non-apocalyptic, real estate market. It’s not unheard of for residents to be paying $3,000 or $4,000 a year on a house with a market value of just twice that. Many here felt they shouldn’t have to pay those outrageous property taxes, considering that most Detroit neighborhoods didn’t have the normal amenities taxes buy—for example, streetlights and regular garbage pickup—until recently. That apathy and the high tax rates, combined with the city’s down-and-out economy ( Detroit’s per capita income is less than $15,000 ), made a tax foreclosure crisis inevitable. Yet Wayne County sat on those back taxes for years, allowing them to pile up until they became unpayable for many. It was only in 2015 that the county began cracking down, when many families’ tax bills had reached more than $10,000. The county seized and sold 30,000 homes at auction that year. At least 10,000 of the homes were occupied. The years ahead promise to be equally punishing.
“We deferred, and waiting clearly made it more difficult,” Wayne County deputy treasurer Dave Szymanski told me at a county-sponsored event for tax relief. “Is that fair? It’s the reality of the situation. There were just too many properties.”
It’s hard to comprehend the scale of what’s happening to Detroit’s outer neighborhoods. The city is sprawling enough that you might not notice a couple of houses becoming abandoned, a block in one corner of the city going to seed. But there are a few places where the misery is concentrated enough that you can comprehend its strength. The Cobo Center on a January day in 2015 was one of them.
The Cobo Center is the city-funded convention center on Detroit’s waterfront. It’s already one of the largest convention centers in the country, but Detroit is currently overseeing a taxpayer-funded $300 million expansion of the place. It hosts the usual expos and gatherings, as well as the Detroit Auto Show each year. But in 2015, over the course of one week in January, it held no fewer than 10,000 Detroiters who’d shown up in a last-ditch effort to save their homes. Most were there to enter into tax payment plans with the county; others had come to seek help from a slew of nonprofits providing guidance (though no financial help) for how to deal with landlords, the county, and banks.
The convention center’s name was sadly apt for the devastation its temporary inhabitants represented. Cobo is named for Albert Cobo, mayor of Detroit from 1950 through 1957 and a notorious racist in both rhetoric and policy. Cobo ran on a campaign opposing “Negro invasions.” Many have blamed Detroit’s decline on white flight, but few have pinpointed the people responsible for it, including Albert Cobo, who did everything in his power to encourage it. Cobo forced the concentration of public housing in the center of the city, refused to build integrated public housing, and supported the construction of highways out to the suburbs. Cobo was a one-man concentrator of urban African
American poverty and disperser of white wealth.
Inside the center named after him that January, the culmination of decades of bad and racist housing policy could be seen on the faces of thousands of Detroit residents who waited patiently in folding chairs in one of the convention center’s immense halls. Each took a number from a red ticket machine as if they were approaching a deli counter. One by one, they were called up to sit at a plastic folding table with representatives from Wayne County’s Treasurer’s Office and work out a payment plan. Nearly every person in the hall was African American.
“Everybody’s black,” one activist remarked to me as she helped foreclosure victims find their way around the building. “Who is the criminal mastermind who put this together? This doesn’t just happen. Something at this scale doesn’t just happen.”
To be sure, there were positive stories that came out of Cobo. Gabriel McNeil, a fifty-two-year-old chef, worked out a plan with Wayne County to lower his back taxes from $10,000 to $6,000. He had to pay $653 upfront, and will now make monthly payments of $66 a month, down from $250.
“I could pick up soda cans and pay that,” McNeil said. “I’m real comfortable.”
But the overall mood at Cobo was one of desperation. There was Krystal Malone, a forty-four-year-old part-time substitute teacher. She bought a house for $10,000 last year without realizing its taxes would come out to about $5,000, and so she fell into $9,000 of debt.
“Why was the property valued so high?” she asked. “Across the street is all abandoned properties. Five thousand dollars a year on a $10,000 house. What sense does that make?”
There was Lula Smith, who had lived in Detroit since 1956, and who began falling behind on her taxes after her husband died and she was diagnosed with thyroid cancer in 2011. She was at Cobo as a last-ditch effort after having attempted to enter into a payment plan several times over the last few years. At Cobo, the county offered to lower her payments to $300 a month.
“At least it shows they care,” she said. “I think they’re really trying to help. I’ll believe them until they prove me wrong.”
For many Detroiters, the county’s assistance was too little too late. Detroit lost 237,000 people between 2000 and 2010. It’d be easy to blame that on the region’s economy, but most of those people moved right across Detroit’s borders into suburbs with less blight, lower taxes, better roads, better lights, and a better police force. Macomb County, right next door to Wayne, saw its black population triple between 2000 and 2010. Those left in Detroit’s outer neighborhoods are people who either can’t afford to live anywhere else or are fighting for their right to stay.
Disa Bryant, forty-eight, fits into both of those categories. She inherited a house from her aunt in 2004 in the desirable Russell Woods section of the city. At the time, she worked for the state of Michigan in its medical records department. But the financial crash of 2008 forced Michigan to cut its budget, and Bryant was let go. After she fell behind on payments for a few years, in 2014 the county put her house on the auction block. Bryant offered $5,000 to
buy it back, but an investor outbid her at $8,000. That investor is now attempting to evict Disa if she can’t pay $1,000 a month in rent.
“They sell you off to the highest bidder and that just sucks,” she said. “The house has been in my family for forty years. Why can’t they buy a vacant home instead of putting someone out on the street?”
There’s a perverse answer to Bryant’s question, an activist from Detroit Eviction Defense explained to me one day: Detroit may have tens of thousands of vacant homes, but the ones that have been lived in have usually been maintained lovingly by the people living in them. The roof repairs, flooring, lighting, and yard upkeep have already been paid for by the existing tenants. Kicking people out is a better investment. And there’s no way to know exactly to whom properties such as Bryant’s are going. Some undoubtedly are sold to individuals, but most, it seems, are sold to small limited-liability companies, or LLCs. One eviction expert named Joe McGuire told me that over the past couple of years, countless small investment groups have descended on Detroit, snapping up properties by the dozen. Their business mailing addresses will often be the home of someone in a far-flung locale with an Internet connection and the expertise to sort through Detroit’s eviction listings.
“It was actually easier dealing with the big banks,” McGuire told me. “There’s a certain kind of rationality at play with them. They just care about money. But now it’s just small-time crazy people. When you’re dealing with them, you’re even further away from effecting real change. And if you win, you win against some guy who owns seven houses, not Bank of America.”
That’s the situation Kenny Brinkley and Sandi Combs are in . Brinkley, a well-known Motown saxophone player, couldn’t find work after heart surgery in 2002. By 2010, the house he and Combs owned had gone to tax foreclosure. The company that bought the home, Detroit Property Exchange (which advertises its phone number as 1-888-FLIP-DETROIT), said the couple could pay rent toward repurchasing their home. But after four years, the couple found out that their payments hadn’t gone toward anything, including property taxes. The property was sold again at tax auction, and this time it was picked up by a California company called Sussex Immobilier. Since purchasing the property, Sussex has been attempting to evict the elderly couple. Detroit Eviction Defense has so far managed to keep them in their home by delaying court dates and finding problems with Sussex’s eviction paperwork.
When I visited Brinkley and Combs in their modest home, Brinkley told me he couldn’t talk too much about the pending eviction out of fear it would cause his heart problems to flare up. So I sat on their plush, faded couch at the front of their living area and spoke with Combs.
The house is well lived-in. Knickknacks—photos, plants, memorabilia from Brinkley’s sax-playing days—took up nearly every surface. Just hiring movers for all this stuff would be an expense Brinkley and Combs could not afford.
“It could be any day now,” Combs told me. “They could come with a dumpster and throw everything into the trash.”
As I spoke with Combs, Brinkley seemed to be keeping his mind occupied by pacing the house, scrubbing the
kitchen, and watering their dozens of plants. But after a while, despite his earlier statement that he would not talk, he cautiously approached the couch where Combs and I were sitting.
“I’m trying to stay busy to keep it off my mind,” he said. “But I just have to face it. It’s there.”
This is the state of the outer sections of Detroit: threats of evictions, water shutoffs, crushing poverty, reduced government services. Study after study document the stress and depression that come with being poor. You can feel that acutely here. People are on edge, afraid, upset, and resigned—and this is in not just one neighborhood but the entire city, minus the 7.2 square miles at its core. People here feel abandoned, pushed to their limits, and unsure of what to do.
Several months after I left Detroit, I heard that Sandi Combs and Kenny Brinkley had been forced to leave their house after a new set of owners came with chainsaws to cut down the massive trees the couple had planted in the front yard forty years earlier. That same day, Brinkley had a heart attack. A few days later, a nonprofit announced that it had purchased a new home for the couple farther out in Detroit, and held a little celebration in a carpeted conference room downtown. The local media reported it as a happy ending.